Posts Tagged ‘Plans’

Here at Cell Canada, we’ve had a great deal of interest in the new Canadian Cellular Carriers. Questions about their service launch dates, technology, pricing, and monthly service plans. Starting with Globalive, we are starting a series where we will summarize and infer what we can to help answer these questions and more.

Globalive

Owner: Orascom out of Egypt has majority ownership but Globalive has controlling interest to meet Canadian foreign ownership regulations. What does this mean? It’s Orascom’s money and they are in charge. Good for competition in Canada. Orascom has about 80 million cellular customers worldwide with properties in the Middle East, Europe, and Asia. That’s more than all of the existing Canadian cellular carriers (Bell, Telus, and Rogers) combined. They will not be muscled out or outspent by the incumbent Canadian carriers.

Management: Globalive is still building it’s management team. At the date of this article, active recruiting is underway for several ‘C’ level roles. The key CEO role is in place however. Ken Campbell is a Canadian with a great deal of experience with start up wireless carriers in Eastern Europe.

Marketing and Brand: Expect a no-frills consumer brand. The betting line to date is on ‘Yak Mobile’. Noticeably, Yak has shut down its www.yakmobile.com web site. In advance of a launch later in the year?

Technology: Globalive will be launching the current revision of the GSM technology train. Expect UMTS and HSPA technology similar to what Rogers has currently deployed.

Plans: Expect innovative, for Canada, low end plans: $10/month, $15/month, etc. and potentially text only plans. The recent moves by Koodo, Solo, and Fido to offer $15 plans with no system access fees are a clear indication of the incumbent Canadian cellular carriers re-positioning their brands to protect their soft flanks – where they expect the new carriers to enter.

Phones: Of course we don’t know specifics of phones that will arrive a year from now but what we can infer is that given their strong buying power (Orascom’s 80 million customers) and targeting of the low end of the market, Globalive – or Yak Mobile – will probably offer basic feature phones and low end smartphones. Expect some unique phones, perhaps more Nokia and other low end feature phones that we haven’t seen in the market to any great degree under the Bell, Rogers, and Telus umbrellas. Also expect that with their buying power, they will get some interesting phones in advance of the incumbent Canadian carriers.

When: Globalive is already building network in the major Canadian cities where it has licenses. There is a lot of work to get a mobile carrier business started and offering services. Network is one aspect but OSS systems, distribution channel, etc. all take time to put into place. Expect a launch in late 4th quater 2009 to 1st quarter 2010.

Hope this answers some of your questions. Feel free to add anything that you may have learned about Globalive’s plans in the Comments section.

We just returned from a couple of trips across Canada and were reminded again of how much we like the Alligato cellular long distance service. During travel to Toronto, Montreal, Regina, Calgary, and Edmonton, we had to use our cell phone extensively to call long distance back to Vancouver as well as to the other travel cities. With Alligato, we were able to make these calls easily and confidently, knowing that we were not getting ripped off by the cellular carriers’ LD rates or having to bother with picking up calling cards (not to mention having to watch out for calling card scams).

We had signed up to Alligato on their pay as you go plan back in the summer. We liked the fact that it was easy to use and there were no setup or any monthly fees. Their rates are similar to home phone long distance rates – much much lower than cellular carrier long distance rates. After a month, we switched over to their Unlimited North America calling plan. It covers unlimited long distance to Canada and the USA for $9.95/month. It’s an amazing price – we used to pay that much for just one call using Bell’s cellular LD. We’ve been using it quite a bit since then. The quality is great and the price is right. Our bill has been $11.15 per month after GST and PST and we call as much long distance as we want.

This trip just reinforced the value for us. We probably did over a hundred minutes of long distance per day from our cell phone. All without worrying about how much it was costing us. We’d highly recommend that you look at the service if you do any long distance calling from your cell phone.

For those eager for an iPhone or Bold, Rogers has rolled out an update on it’s data plans that deserves some attention. The plans are reasonably globally competitive and compared to the original Rogers data plans pre-consumer backlash, they are wins for Canadian consumers.

Even more importantly, Rogers has taken smart steps to derisk the data purchase. Rogers will now not charge for the first three months on a data plan to help consumers see reporting on their usage levels and then select the optimum plan. As well, they have placed a $100 cap on excess usage. Providing a limit on risk or unknown exposure to charges that has left consumers burned and wary in the past. Both very smart moves addressing two major data plan barriers to entry for consumer.

We are still fans of the $30 6GB plan. Sign up now. It will disappear at the end of September and we will not see anything similar until late 2009/early 2010 when the new entrants begin to enter the market.

Back To School Student Cell Phone Plans are summarized very well by Firestorm on RedFlagDeals.com.

Though most of these are better deals than standard market plans, they still pale when compared to corporate plans and employee purchase plans that can be acquired with a bit of homework. Also, as we recommend in 10 Tips for Saving on Your Cell Phone Bill, ensure that you compare at a total bill level. Many of the plans below require another $15 for Caller ID and Voicemail, or have similar expensive basic bolt-ons that drive up their price by $10/month to $30/month for most people.

Firestorm’s summary:

Rogers
Not listed on website.

Add these to ANY plan as long as you’re a student:
Evenings start at 6PM for free for 3 years
Home Calling Zone for $5 off/month for 3years
If you sign up for 3 years with $15 or $20 Value Pack, you get $5 off each month for 3 years [remember, $15 value pack includes unlimited web browsing and $100 off any vision phone]

To help navigate the recent changes in the cellular industry from a consumer perspective, we have summarized a list of 10 Tips for Managing Your Cell Phone Bill

Avoid signing up for service contracts that will extend past early 2010. The emergence of new carriers in late 2009 and early 2010 will lead to much better market pricing from both the incumbents and new entrants.

When shopping for a new plan, compare plans at a total bill level, including all options, fees, and charges. This is can potentially add up to twice the advertised local minutes plan charge so it only makes sense to compare plans based on the expected monthly bill versus just one plan component.

Shop at independent dealers, such as Wireless Wave, instead of corporate stores. Our general experience has been that sales people at independent dealers seem to work harder to build the best package deal for customers.

Get the sales people to do the work for you. The best way to shop for plans at the total bill level is to have the sales people build the lowest total bill options for your needs. We recommend taking your last two bills with details on your usage; Minutes usage levels (local, long distance, outgoing, incoming, evenings, and weekends), text usage levels, data usage levels, and options, to independent carrier dealers and letting them build the lowest cost total bill plan that they can to meet your needs. Have them email you the results and you can easily compare total bill options across carriers.

Corporate Plans. Plans available to larger corporations can cost 15% to 30% less than those offered to individual consumers. If you have anyone in your family that works for a large corporation, have them check with their HR or IT department to see if the corporate cellular contract allows for employee purchases.

Do not use the carrier’s long distance. Carrier long distance charges are much higher than home or office long distance charges and are one component of your cellular service that can be easily avoided. For long distance calling from your cell phone, use services from companies like Alligato Mobile. They work well with your cell phone, are very convenient, and cost very little.

Do not use the carrier’s roaming. Roaming charges are very expensive and can easily add more than $1 per minute to your voice usage costs. If you travel frequently, use a service like Maxroam that offers very cost effective roaming calling from most of the countries in the world. If you only need occasional access to roaming, purchase a local prepaid phone or local prepaid SIM card from a shop at your airport of arrival. All international airports usually have shops that offer easy access to these products and they will save you a bundle on calling from your destination country.

Use more text, less voice, and avoid an email plan if you can. As part of your package, purchase a bulk text package and use text instead of email. An average user can communicate as well with an average text message as he or she can within an average email. Just strip away the unnecessary words and get to the point.

Wait to purchase the iPhone. If you can bear to wait. As per Tip #1, avoid locking yourself into a long term contract when significantly better offers will be available in 12 to 18 months.

The iPhone has finally arrived in Canada with an array of plan options, Bell and Telus have just announced new incoming text message charges, and there will be three new carriers vying for cellular customers by 2010. It has been an unprecedented few weeks in the Canadian cellular market. Though there has been a deluge of press coverage, most consumers are still in the dark about what these changes mean to them and their wallet.

Cell phones have become a fashion item, a personal statement, a lifeline, a business tool, an entertainment conduit, and a must-have 24×7 accessory. Over 50% of the world’s population now carries a mobile phone. This has grown rapidly from just 12% of the world’s population in the year 2000. In Canada, there are now over 20 million active cell phone accounts representing over 60% of the population. In more than 30 advanced wireless countries, mobile phone penetration has surpassed 100%. In these advanced wireless countries, as a precursor of the future in Canada, mobile phones have also taken on the roles of electronic wallets, personal televisions, and much more.

The iPhone

Why so much hype? The introduction of the iPhone in Canada heralds the beginning of a new era in mobile communications. Though referred to as a phone, it is much more. It is an Internet connected portable computer with a revolutionary user interface. It portends the mass market emergence of the mobile Internet – the Internet in your pocket. As a platform, it is as revolutionary as the first IBM PC with DOS. Just as during the early days of the personal computer, there have been other smart phones on the market for several years, the iPhone however arrives with the ecosystem elements to drive the smart phone into the everyday lives of consumers.

From an ecosystem perspective, the iPhone combines an attractive piece of hardware with an elegant, innovative, and class leading user interface. With Safari, it has by far the best mobile Internet browser. With the unique iPhone App Store, it is by far the easiest way for consumers to discover, purchase, and install software on a mobile phone. This is evident in the 10 million downloads from the App Store in just the release weekend of the 3G iPhone. According to Apple, there are now more than 800 native iPhone applications available via the App Store, with 200 of them offered free of charge. The completeness of the developer kit and the focus on creating an easy take to market, transaction, and billing and collection capability for developers will ensure that iPhone functionality grows tremendously as software developers create innovative new programs, ultimately leading to further consumer adoption.

So what does this mean to the end consumer? When the first cell phone went on sale in Canada on July 1, 1985, the vast majority of the population saw it as a specialized niche business tool instead of the must have mass market accessory that it has become. Certainly, the majority of the population did not expect to be personally paying over $60 per month in 2008 for this new cellular service. In the same way that the cell phone and home high speed Internet have become integral necessities of life for many, the mobile Internet will become an integral part of the lives of the majority of Canadians in the next 5-10 years. Whether it is an iPhone or a competitor device, a great majority of us will not be able to leave home without it. All of the world’s information available all the time, the Internet in your pocket, will become an indispensible part of everyday life. And of course, plan to budget an additional $30 to $50 per month to feed this habit.

Text Messaging

In the middle of the Rogers and Apple iPhone PR blitz and resulting Canadian consumer rebellion, as evident by www.ruinediphone.com’s 60,000 plus signatures, Bell and Telus announced that they are both going to begin charging for incoming text messages at 15 cents per message for customers not on bulk text messaging plans. By timing it this way Telus and Bell may have hoped to slip quietly under the iPhone PR and the Rogers iPhone plan pricing backlash. Instead the media positioned it as a continuation of the consumer backlash story, just as the Rogers plan story was beginning to crest.

By introducing this additional charge, Bell and Telus will double their usage based text messaging revenue with all of the increased revenue coming in at 100 percent profit. They currently collect 15 cents per message from the sender. Now, with this change, they will also collect 15 cents from the receiver. That is a doubling of price for text messaging without any change in the cost or the usage. Consumers were noticeably upset and the media fanned the anger by discovering confused consumers that worried that their text messaging charges would increase by hundreds of dollars. Notifying these heavy users that they could mitigate these hundreds of dollars of additional charges by subscribing to bulk text messaging plans for $15 or so per month would not have made for the same sound bites.

Nonetheless, the release o f the much anticipated iPhone, Roger’s mismanagement of the data plans, and the Bell and Telus text messaging profit grab has further fueled the love hate relationships consumers have with their cell phone and the cell phone carriers. Consumers are heavily attached to their cell phones but across the board feel that they are being unfairly gouged by the wireless carriers. Whether it is an ever escalating System Access Fee, or excessive long distance pricing, or much feared data pricing, or all of the small additions such as text packages and caller ID packages that take a $30 plan and turn it into a $60 bill every month. The new Rogers data plans as well as the new charges for incoming texts add to the already confusing array of packages, options, unknowns, and pricing that every consumer faces. Whether intentional or not, this confusion works to the benefit of the big three cellular carriers. When faced with the difficult task of comparing plans, options, and unknowns, consumer behavior dictates that, in general, consumers will avoid the stress by simplifying their decision. In this case, consumers simplify their shopping down to a brand, a phone, and a local minutes package. Ignoring and passively accepting that they will be charged some unknown amount for everything else.

The New Carriers

Lost in the excitement of the iPhone launch, the Rogers data plan backlash, and the Telus and Bell profit grab, has been the news that there will soon be two to three new carriers in each market that will compete for cellular customers against the incumbents Telus, Bell, and Rogers. This good news for consumers comes as the federal government’s process for awarding new cellular spectrum licenses approaches completion.

Industry Canada initiated an auction for new cellular spectrum this year that set aside part of the spectrum for non-incumbent carriers. This auction is almost complete and the resulting new landscape is becoming evident.

Likely beginning in late 2009 to early 2010, each market in Canada will see the emergence of two to three new carriers. The incumbent cable companies will begin to offer cellular service in their cable territories: Shaw in the West, Videotron in Quebec and parts of Ontario, and Bragg in Atlantic Canada. As well, Globalive will offer service in most parts of Canada outside of Quebec and a company called DAVE will offer service in large and medium sized cities in Ontario and Western Canada.

The incumbent cellular carriers will prepare well to defend against the new entrants through strategies such as using their flanker brands Fido (Rogers), Solo (Bell), and Koodo (Telus) to take away market opportunity, and by incenting customers into long term contracts. The new entrants however will still change the dynamic of the market. The strength of the incumbents in the market, and the high cost of both the spectrum and network build, will force the new entrants, especially the non-cable company entrants, to enter the market aggressively or risk an early demise.

The new entrants are all expected to build GSM technology networks and Telus and Bell are rumored to be considering a conversion to GSM technology. From a consumer perspective, this means that as in Europe and other regions, consumers will not have to change their phone every time they want to change a carrier. As well, Rogers, by virtue of its GSM network, will no longer have a monopoly on GSM only phones such as the iPhone.

Additional carrier choice, a single network technology, and an aggressive approach to market share should portend better pricing and offers for consumers.

The story of Bell and Telus introducing a 15 cent charge for incoming text messages has been widely covered with the usual man-on-the-street interviews.

Hyperbole flies on either side.

The press finds lost soul txtrs that will see charges in the hundreds of dollars. Please someone tell these people that they can add unlimited texting to their plan for about $15/month.

Bell and Telus on the other hand defend the need to add the charge to cover the cost of delivering text messages. This logically implies that when they originally set text messaging charges, they mistakenly assumed that text messages were only sent but not received. An insulting and disingenuous argument. Similarly, their argument regarding increasing infrastructure costs driven by the popularity of texting is also weak. A packet switched 160 Byte SMS message requires significantly less network resources than a 1 minute circuit switched voice call. In the US market, CrunchGear did a simplified analysis of the price of text messages relative to the price of wireless data and came to the conclusion that AT&T is pricing text messages at $1,310/Megabyte. A bit simplified but still illustrative of the big hole in the centre of the Bell and Telus ‘cost’ rationale for the incoming text charges. All of a sudden, the Rogers iPhone data plans don’t look so bad.

As this story has played out, two thoughts stand out for me:

1.How did two competitors decide to introduce an exactly equivalent new charge on exactly the same day? Has no one noticed that this smells of collusion? Is the competition bureau sleeping?Industry Minister Prentice is upset with the charges but has not shown any concern about the circumstances: “While I have no desire to interfere with the day-to-day business decisions of two private companies, I do have a duty as minister of industry to protect the interests of the consuming public when necessary,” Prentice said in a statement. Have Canadians become so desensitized to the oligopolistic behavior of the industry that we accept this as normal?

2.Why now?Why did Bell and Telus announce this now during a period of massive iPhone 2.0 PR and the consumer backlash against Rogers’ data plans?Were they hoping that it would slip in under the other news?If so, they’ve miscalculated in a big way.If anything, with Rogers backing down on data plans, whether temporarily or not, the bubbling consumer anger has turned to point at Telus and Bell.The heat comes off Rogers and soon stories about iPhone launch breakfasts, lineups, and excited early buyers will put the rose back into the Red.

The cell industry in Canada has been a circus the last few weeks. As a result of all of this, in the short term at least, it seems that everyone loses. Bell and Telus mess up their timing and damage their brands, Rogers damages its possible massive upside with the iPhone, and of course the consumer loses all around. In the medium term, Bell and Telus will rake more margin, Rogers will adopt the same incoming text charge and rebuild its brand around back to school and holiday season iPhone sales. The consumer will still be sitting in the nosebleed seats. At least until late 2009, early 2010 when two to three new competitors enter most markets and the party starts.